diff --git a/client-src/index.js b/client-src/index.js
index 60527ef029..3aa955bc50 100644
--- a/client-src/index.js
+++ b/client-src/index.js
@@ -45,6 +45,7 @@ import sendMessage from "./utils/sendMessage.js";
  * @property {boolean} isUnloading true when unloaded, otherwise false
  * @property {string} currentHash current hash
  * @property {string=} previousHash previous hash
+ * @property {boolean} hasRuntimeError true when a runtime error occurred
  */
 
 /**
@@ -84,8 +85,17 @@ const decodeOverlayOptions = (overlayOptions) => {
 const status = {
   isUnloading: false,
   currentHash: __webpack_hash__,
+  hasRuntimeError: false,
 };
+if (typeof window !== "undefined" && window.addEventListener) {
+  window.addEventListener("error", () => {
+    status.hasRuntimeError = true;
+  });
 
+  window.addEventListener("unhandledrejection", () => {
+    status.hasRuntimeError = true;
+  });
+}
 /**
  * @returns {string} current script source
  */
@@ -403,8 +413,7 @@ const onSocketMessage = {
   invalid() {
     log.info("App updated. Recompiling...");
 
-    // Fixes #1042. overlay doesn't clear if errors are fixed but warnings remain.
-    if (options.overlay) {
+    if (options.overlay && !status.hasRuntimeError) {
       overlay.send({ type: "DISMISS" });
     }
 
@@ -473,7 +482,7 @@ const onSocketMessage = {
   "still-ok": function stillOk() {
     log.info("Nothing changed.");
 
-    if (options.overlay) {
+    if (options.overlay && !status.hasRuntimeError) {
       overlay.send({ type: "DISMISS" });
     }
 
@@ -482,6 +491,8 @@ const onSocketMessage = {
   ok() {
     sendMessage("Ok");
 
+    status.hasRuntimeError = false;
+
     if (options.overlay) {
       overlay.send({ type: "DISMISS" });
     }
diff --git a/test/e2e/overlay.test.js b/test/e2e/overlay.test.js
index be3c059233..114c413aaa 100644
--- a/test/e2e/overlay.test.js
+++ b/test/e2e/overlay.test.js
@@ -1976,4 +1976,40 @@ describe("overlay", () => {
       await server.stop();
     }
   });
+
+  it("should keep overlay visible for runtime error on initial load", async () => {
+    const compiler = webpack(config);
+
+    const server = new Server(
+      {
+        port,
+      },
+      compiler,
+    );
+
+    await server.start();
+
+    const { page, browser } = await runBrowser();
+
+    try {
+      await page.goto(`http://localhost:${port}/`, {
+        waitUntil: "networkidle0",
+      });
+
+      await page.addScriptTag({
+        content: `
+        throw new Error("Initial runtime error");
+      `,
+      });
+
+      await delay(1000);
+
+      const overlayHandle = await page.$("#webpack-dev-server-client-overlay");
+
+      expect(overlayHandle).not.toBeNull();
+    } finally {
+      await browser.close();
+      await server.stop();
+    }
+  });
 });
diff --git a/test/fixtures/overlay-runtime-error.js b/test/fixtures/overlay-runtime-error.js
new file mode 100644
index 0000000000..e2891e4a51
--- /dev/null
+++ b/test/fixtures/overlay-runtime-error.js
@@ -0,0 +1 @@
+throw new Error("Initial runtime error");